Uber Eats disputes Little Rock tax lawsuit

Making Uber Eats collect taxes on meal deliveries is "legislative overreach," amounts to double taxation and violates state law, attorneys for the company say.

In a court filing Monday afternoon, Uber Eats' attorneys asked Pulaski County Circuit Judge Wendell Griffen to dismiss a lawsuit filed against the company March 19 by the Little Rock Advertising & Promotion Commission.

The commission contends that Uber Eats has violated city ordinance by failing to get an advertising and promotion tax permit and hasn't collected the 2% advertising and promotion tax on restaurants' gross receipts. A similar tax is levied on lodging.

The commission oversees the Little Rock Convention and Visitors Bureau, which manages the Statehouse Convention Center, the River Market, the Robinson Center and other facilities in town. Its lawsuit said a meal-delivery company such as Uber Eats is a "platform, online or offline" required under city code to collect the tax, which also is levied by the restaurant when a meal is ordered.

Uber Eats began operations in Little Rock in early 2018, delivering restaurant meals ordered by customers online or through a mobile app. The "platform" language in the advertising and promotion tax was added to city code around the same time.

John Keeling Baker, a Little Rock attorney with the Mitchell, Williams, Selig, Gates & Woodyard firm who filed the lawsuit on the commission's behalf, declined Tuesday to comment. He said in March, after filing the lawsuit, that Uber Eats' competitors in Little Rock are complying with the law.

The lawsuit didn't specify any amount in taxes that should have been collected by Uber Eats but weren't.

"This case is about legislative overreach," Uber Eats' attorneys wrote. "This overreach violates Arkansas law and results in tax being paid twice on the same transaction."

Uber Eats, through Delaware-based Portier LLC, also hasn't registered with the Arkansas secretary of state's office to do business, the city said in its lawsuit.

Uber Eats, in other filings on Monday, asked that three attorneys not licensed in Arkansas to practice law be allowed to represent the company. Those attorneys are Eric Tresh of Atlanta and Todd Betor and Michele Borens, both of Washington, D.C. They'll work locally with Matthew C. Boch and Michael G. Smith of the Dover Dixon Horne firm in Little Rock.

Those attorneys said Arkansas law specifying how local advertising and promotion taxes can be levied doesn't include any language for "platforms" such as Uber Eats. "Based on the plain language of the statute, platforms are not among the listed businesses which include restaurants, cafes or any other types of retail food business," they wrote.

Uber Eats also cited a March 26 opinion from the state Department of Finance and Administration in support of its argument that the advertising and promotion tax and permit doesn't apply to its meal deliveries. The name of the party requesting the opinion was redacted from the department's response (Opinion No. 20180926).

"Based on the facts you have presented as detailed above, the delivery service is operating as a courier of the food rather than a reseller of the food ordered from the Restaurant," the opinion said, putting responsibility of collecting the appropriate taxes, including taxes on delivery charges, on restaurants.

Uber Eats said the city's lawsuit was a "transparent effort to double-dip on taxes that already are collected from restaurants."